Yemen: The Kindness of Strangers

Yemen: The Kindness of Strangers

KINDNESS OF
STRANGERS: Food
aid outside a food
distribution center for
poor families in Yemen’s
capital Sana’a, March 17
is made available. But
many are depending on
the kindness of individual
benefactors.

When Adel Mahmoud, 54, a teacher in Taiz province, went to buy commodities for Ramadan, he was shocked to find a huge increase in prices.

Although it’s often the case that there is an increase in prices before the sacred month, as some of Yemen’s Muslims tend to buy in bulk—and special kinds of food at that—Mahmoud wasn’t prepared for how much. This month, the main reason for the hike is the value of Yemen’s currency. “Food prices usually increase by 10 percent, but this year some prices have increased by more than 25 percent. Traders say that the reason for this is the increase of the dollar against the rial,” Mahmoud told Newsweek Middle East.

The Central Bank of Yemen (CBY) lowered the value of the rial against the U.S. dollar in March 2016, from 214 to 250 Yemeni rials to the dollar—this after the dollar was being changed on the black market for 279 Yemeni rials.

But the revaluation hasn’t resolved Yemen’s main problem, as traders are in dire need of dollars to import goods. Unfortunately, the CBY can’t provide them with dollars, as Yemen had halted oil and fuel exports when war broke out. It’s left to the black market to control the economy.

Mahmoud says his salary is YR82,000 ($273). Prices may have increased, but his salary has not. So his earnings are no longer enough for him to buy the basic needs required for his six family members.
Mahmoud has had enough. “The prices have increased because of the value of dollar, so the government should increase our salaries. We’ve suffered in the last few years.”

The price of a 50kg bag of flour used to cost YR6,000 ($24), but now costs YR8,000 ($32). The price of a 50kg sugar used to cost YR9,000 ($36) and now costs YR13,000 ($52).

The increase of prices is not the only problem that residents face. Many people have lost their jobs because of the war, whilst others cannot find work, so the overall lack of income compounds the problem.

Mahmoud is luckier than Qaed Al Haddar, 55, a building laborer. Haddar cannot meet his family’s needs for Ramadan this year. “Sources of income have declined and the prices have increased, so I cannot buy all that I need during Ramadan. I’ve only bought basic commodities,” he told Newsweek Middle East.
Yemen’s children tend to enjoy the meals of Ramadan, but for many, like Haddar’s family most items are off the menu. “I would like to buy cream caramel and custard for my children, but I do not have money to buy that. We will forfeit many things in our Ramadan meals this year.”

The traders accuse the CBY of being the cause behind this increase.

Talal Al Mahulyah, a trader in Taiz province told Newsweek Middle East that “usually we import more commodities before Ramadan, and we buy commodities either in dollars or Saudi rials, but this year we [can’t find either] in the banks. We had to look for them on the black market.”

The black market in Sana’a is the country’s principle exchange, where dollars and Saudi rials can be traded at any time. Houthi rebels often storm it to arrest moneychangers in an attempt to punish them for speculating—a practice some discourage.

“The Houthi rebels want to control the economy by force, but they can’t, as they don’t have money in the CBY. So usually they release moneychangers without any solution—and we still depend on the black market to get dollars,” Mahulyah added.

According to Mahulyah, some traders have gone bankrupt, forced to sell their stock at low prices and unable to buy new commodities.

He is pessimistic about the state of the economy, and expects prices to increase more during the next few months, because of the need to import commodities for Eid. “The value of the dollar is not stable, and it is increasing every day, so the prices of commodities will increase [over] the next few months.”

Yemen used to export oil, but when the war broke out, the production of oil stopped and Yemen became a net importer.

Economic analyst, Ahmed Saeed Shammakh told Newsweek Middle East: “Yemen depends on deposits in the local banks, in addition to some money coming from emigrants outside Yemen. The money of the depositors is decreasing every day, so if the production of oil does not resume soon, the value of the dollar will increase.”

If a depositor wants to sell dollars, he withdraws his dollars from the bank and goes to sell them in the black market. According to Shammakh, this helps the black market to control the economy of Yemen.
The closure of many embassies has also aided the economic crisis, Shammakh added, and “in addition to the closure of exporting fuel and oil, most embassies have been closed in Sana’a since April 2015. It is these embassies that have helped to bring dollars to Yemen.”

All these developments indicate that there is a money shortage and a dire need for dollars, especially before Ramadan.

Rafat Al Gailany, a moneychanger in Taiz’s Al Hawban area, was originally an owner of a home furnishings store, but because his store hasn’t done well in the past year, he was forced to become a moneychanger.

“The banks cannot provide you with dollars, and traders are in need of dollars, so the black market increased the value of dollar to incite residents to sell dollars,” he told Newsweek Middle East.

He confirmed that many people buy dollars and hide the money in their homes, describing this as “bad behavior.” It creates a problem, as people withdraw dollars from banks to their homes, so no one actually uses the money.

At the beginning of the war, the CBY directed all Yemeni banks to stop giving dollars to the depositors, and they had to withdraw their money in Yemeni rials. But by March 2016, the CBY allowed depositors to withdraw their dollars from the banks. Some of them did so, and stashed them in their homes for safe-keeping.

Ammar Al Malah, 30, used to have some dollars in the Yemeni Bank for Construction, but he was unable to withdraw money over the last year. Now however, he can withdraw any amount in dollars.

He explained, “When the bank allowed depositors to withdraw their dollars, I did, and then I bought a car and hid the rest at my house, as I cannot trust the banks anymore.”

Shammakh feels Yemen needs immediate help to save its economy, such as a donation by other countries. If not, “Yemen’s economy will continue to collapse.”

Whilst the economic situation is worsening daily, there are some kind individuals who help the poor especially during Ramadan.

Prior to the start of Ramadan, some volunteers had begun to distribute wheat, flour, oil, rice and sugar for poor families in the different provinces of Yemen—of their own accord.

In Taiz province, most of the residents now receive basic commodities from these generous benefactors.
Muneer Hashim, 52, a painter in Taiz city, was lucky enough to get basic commodities from generous handouts, so he has enough to last a while. “The Yemeni government does not care about us, but the generous have not forgotten us. I got two bags of wheat and two bags of flour, in addition to oil and sugar, so my neighbors and I have food for more than three months,” he told Newsweek Middle East.